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Title: |
Transfers, Welfare and Inter-industrial
Externalities |
| Author: |
Choi, Jai-Young |
| Author
Affiliation: |
Lamar U |
| Source: |
International Economic Journal, Autumn 1990, v. 4, no. 3, pp. 55-67 |
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Publication Date: |
Autumn 1990 |
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Abstract: |
This paper examines the welfare effects of
a unilateral transfer for both the donor and the receiving countries
when industrial production functions exhibit bi-directional
externalities. It is shown that the welfare effects depend on the
direction of the transfer-induced shift in the terms of trade, the
relative magnitudes of the value-adjusted inter-industrial
externalities, in addition to the primary effect of the transfer. The
conditions for different welfare paradoxes, the strong paradox and the
weak paradox, are obtained; and the likelihood of the occurrence of each
paradox is considered. |
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